S. 1932 (109th): Deficit Reduction Act of 2005

Introduced:
Oct 27, 2005 (109th Congress, 2005–2006)
Sponsor:
Sen. Judd Gregg [R-NH]
Status:
Signed by the President

The bill’s title was written by the bill’s sponsor. S. stands for Senate bill.

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Library of Congress Summary

The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress.


2/8/2006--Public Law. (This measure has not been amended since the Conference Report was filed in the House on December 19, 2005. The summary of that version is repeated here.) Deficit Reduction Act of 2005 -
Title I - Agriculture Provisions
Agricultural Reconciliation Act of 2005 -
Subtitle A - Commodity Programs
Section 1101 -
Amends the Farm Security and Rural Investment Act of 2002 to revise the national dairy market loss payment formula by decreasing the multiplier for the periods beginning on: (1) October 1, 2005, and ending on August 31, 2007; and (2) September 1, 2007. Extends the sign-up and contract periods through September 30, 2007.
Section 1102 -
Reduces advance payments for peanuts and for covered commodities to: (1) 40% for crop year 2006; and (2) 22% for crop year 2007.
Section 1103 -
Repeals authority to issue upland cotton user marketing certificates.
Subtitle B - Conservation
Section 1201 -
Cancels the watershed rehabilitation program.
Section 1202 -
Amends the Food Security Act of 1985 to: (1) extend conservation security program authority through FY2011; and (2) extend and increase Commodity Credit Corporation (CCC) funding for such program.
Section 1203 -
Amends environmental quality incentives program provisions to: (1) extend program authority through FY2010; (2) apply the aggregate payment limitation to any six-year period. (Currently, such limitation applies to FY2002-FY2007); and (3) set forth specified funding provisions for FY2007-FY2009, and for FY2010.
Subtitle C - Energy
Section 1301 -
Amends the Farm Security and Rural Investment Act of 2002 to reduce FY 2007 funding for the renewable energy systems and energy efficiency improvements program.
Subtitle D - Rural Development
Section 1401 -
Cancels authority to obligate funds previously made available for expanded access to broadband telecommunications services in rural areas unobligated as of October 1, 2006, as of that date.
Section 1402 -
Cancels authority to obligate funds previously made available for value-added agricultural product market development grants unobligated as of October 1, 2006, as of that date.
Section 1403 -
Amends the Consolidated Farm and Rural Development Act to terminate rural business investment program funding after FY2006. Cancels authority to obligate funds previously made available for such program unobligated as of October 1, 2006, as of that date.
Section 1404 -
Cancels authority to obligate funds previously made available for rural business strategic investment grants unobligated as of October 1, 2006, as of that date.
Section 1405 -
Amends the Farm Security and Rural Investment Act of 2002 to terminate rural firefighters and emergency personnel grant authority after FY2006. Cancels authority to obligate funds previously made available for such program unobligated as of October 1, 2006, as of that date.
Subtitle E - Research
Section 1501 -
Amends the Agricultural Research, Extension, and Education Reform Act of 1998 to eliminate FY2007-FY2009 CCC transfer funding for the initiative for future agriculture and food systems. Makes funds available for a two-year period from the date of transfer, except for FY2006 funds which shall be available for a one-year period beginning on October 1, 2005.
Title II - Housing and Deposit Insurance Provisions
Subtitle A - FHA Asset Disposition
Section 2003 -
Provides for Federal Housing Administration (FHA) asset disposition. Subjects the discount sale of multifamily real property during FY2006-FY2010, by the Secretary of Housing and Urban Development (HUD), to the availability of appropriations to the extent that the property value exceeds the sale proceeds. States that such transaction is not subject to the availability of appropriations if the multifamily real property is sold during that period for an amount equal to or greater than the property market value. Subjects a discount loan sale during FY2006-FY2010 to the availability of appropriations to the extent that the loan value exceeds the sale proceeds. States that such transaction is not subject to the availability of appropriations if the discount loan sale is sold, during such fiscal years, for an amount equal to or greater than the loan market value.
Section 2004 -
Amends the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1997 to state that a grant provided during FY2006-FY2010 for the necessary costs of rehabilitation, demolition, or construction on HUD-owned multifamily properties (with a view to disposing of them) shall be available only to the extent that appropriations are made in advance for such purposes, and shall not be derived from the General Insurance Fund. Amends the Housing and Community Development Amendments of 1978 to limit discretionary assistance by the Secretary of HUD for upfront grants during FY2006-FY2010 for the necessary cost of rehabilitation and other related development costs
Subtitle B - Deposit Insurance Reform
Federal Deposit Insurance Reform Act of 2005 -
Section 2102 -
Merges the Bank Insurance Fund and the Savings Association Insurance Fund into the Deposit Insurance Fund (DIF).
Section 2103 -
Amends the Federal Deposit Insurance Act (FDIA) and the Federal Credit Union Act to prescribe an inflation adjustment formula governing the standard maximum deposit insurance amount (defined as $100,000). Requires the FDIC Board of Directors and the National Credit Union Administration Board, upon determining every five years that an inflation adjustment is appropriate, to calculate it and prescribe jointly the new standard maximum deposit insurance amount (for depository institutions) and the standard maximum share insurance amount (for credit unions). Requires the FDIC to provide pass-through deposit insurance for the deposits of an employee benefit plan. Prohibits an insured depository institution that is neither well capitalized nor adequately capitalized, from accepting such deposits. Increases from $100,000 to $250,000 the standard maximum deposit insurance for certain retirement accounts.
Section 2104 -
Amends the FDIA to replace assessment guidelines for achieving and maintaining a designated reserve ratio (DRR) and for independent treatment of deposit insurance funds. Requires the FDIC Board of Directors (Board) to set assessments as it determines appropriate. Declares that no insured depository institution shall be barred from the lowest-risk category solely because of size. Reduces from five years to three years the mandatory assessment recordkeeping period. Increases penalties from $100 to 1% of assessments per day for failure of a depository institution assessed more than $10,000 to make timely assessment payments. Reduces the statute of limitations for assessment actions from five years to three years after the date the assessment was due. Provides that if an insured depository institution has made a false or fraudulent statement with intent to evade its assessment, the FDIC shall have until three years after discovery of the false or fraudulent statement in which to bring an action to recover the underpaid amount. Deems assessment deposit information to be conclusive and not subject to change if it is contained in records that are no longer required to be maintained beyond the semiannual period.
Section 2105 -
Replaces the current 1.25 percent DRR used to recapitalize undercapitalized insurance funds with a reserve ratio range of 1.15 to 1.5% of estimated insured deposits, subject to specified factors and annual redetermination.
Section 2106 -
Directs the Board to collect information from all appropriate sources in determining the risk of DIF losses.
Section 2107 -
Revises requirements for FDIC repayment of overpaid assessments and refunds of any balance in the insurance fund in excess of the DRR. Prescribes guidelines governing the payment of mandatory dividends to insured depository institutions whenever the DIF reserve ratio exceeds specified percentages of the estimated insured deposits required to maintain the DRR. Cites conditions under which the Board may suspend or limit dividends if it makes certain determinations in writing. Requires the Board to provide a one-time credit based upon the December 31, 1996, assessment base of each eligible depository institution, as compared to the combined aggregate assessment base of all such institutions. Places a temporary restriction on the use of such credits. Restricts the amount of such credit for depository institutions that exhibit financial, operational, or compliance weakness, including undercapitalization.
Section 2108 -
Requires the Board to establish and implement a DIF restoration plan whenever its reserve ratio is projected to fall, or actually falls below the DRR. Prescribes requirements for such plans, notably restoration to the DRR level within five years (or such longer period as the Corporation may determine to be necessary due to extraordinary circumstances).
Section 2109 -
Requires the FDIC to prescribe final regulations, within 270 days after enactment of this Act, establishing the DRR, implementing increases in deposit insurance coverage, implementing the dividend requirement and the one-time assessment credit, and providing for premium assessments.
Title III - Digital Television Transition and Public Safety
Digital Television Transition and Public Safety Act of 2005 -
Section 3002 -
Amends the Communications Act of 1934 to direct the Federal Communications Commission (FCC), by February 18, 2009: (1) to terminate all licenses for full-power television (TV) stations in the analog TV service, and require the cessation of broadcasting by such stations in the analog TV service; and (2) to require that all broadcasting by Class A stations, whether in the analog or digital TV service, and all broadcasting by full-power stations in the digital TV service, occur only between channels 2 and 38, inclusive, or 38 and 51, inclusive (between frequencies 54 and 698 megahertz, inclusive).
Section 3003 -
Provides deadlines for the FCC auction of recovered analog spectrum. Extends auction authority through the end of FY2011.
Section 3004 -
Requires: (1) proceeds from the auction of recovered analog spectrum to be deposited into the Digital Television Transition and Public Safety Fund (Fund) (established in this section); and (2) a specified amount from the Fund to be transferred to the general fund of the Treasury on September 30, 2009.
Section 3005 -
Directs the Assistant Secretary of Commerce for Communications and Information (Assistant Secretary) to: (1) implement and administer a program through which U.S. households may obtain, upon request, up to two coupons that can be applied toward the purchase of digital-to-analog converter boxes; and (2) make specified payments from the Fund through FY2009 to carry out such program. Provides that all such coupons, valued at $40 each, shall expire three months after issuance. Authorizes the use of additional funds if the Assistant Secretary certifies to the congressional commerce committees that current amounts will be insufficient to fulfill coupon requests from eligible households.
Section 3006 -
Authorizes the Assistant Secretary to use amounts from the Fund to implement a grant program to assist public safety agencies in the acquisition of, deployment of, or training for the use of interoperable communications systems that utilize, or enable interoperability with systems that can utilize, reallocated public safety spectrum for radio communication. Requires the public safety agency to provide, from nonfederal sources, at least 20 percent of the costs of acquiring and deploying the systems funded under the grant program.
Section 3007 -
Directs the Assistant Secretary to use amounts from the Fund to carry out a grant program to reimburse the Metropolitan Television Alliance (formed by New York City TV broadcast licensees to locate new shared broadcasting facilities as a result of the attacks of September 11, 2001) for costs incurred in the design and deployment of a temporary digital TV broadcast system in the New York City area to ensure an adequate digital TV signal there.
Section 3008 -
Directs the Assistant Secretary to use amounts from the Fund to implement and administer a program through which each eligible low-power TV station may receive compensation toward the purchase of a digital-to-analog conversion device to convert the incoming digital signal of its corresponding full-power TV station to analog format transmission on the low-power TV station's analog channel.
Section 3009 -
Directs the Assistant Secretary to use amounts from the Fund to implement and administer a program through which each licensee of an eligible low-power TV station may receive reimbursement for equipment to upgrade low-power TV stations in eligible rural communities from analog to digital format.
Section 3010 -
Directs the Assistant Secretary to use amounts from the Fund to implement: (1) a unified national emergency alert system, including a tsunami warning and coastal vulnerability program; and (2) the ENHANCE 911 Act of 2004.
Section 3012 -
Directs the Secretary of Commerce, upon a specified condition, to make amounts from the Fund available to the Secretary of Transportation for carrying out the essential air service program for FY2007 or FY2008.
Section 3013 -
Directs the FCC to assess extraordinary fees for licenses in the aggregate amount of $10 million, which shall be deposited in the Treasury during FY2006 as offsetting receipts.
Title IV - Transportation Provisions
Section 4001 -
Amends maritime law to revise and extend vessel tonnage duties for FY2006-FY2010.
Title V - Medicare
Subtitle A - Provisions Relating to Part A
Section 5001 -
Amends title XVIII of the Social Security Act (SSA) to require that subsection (d) hospitals that do not submit certain required data to the Secretary of Health and Human Services (Secretary in this title) in FY2007 and each subsequent year will have the applicable market basket percentage reduced by two percentage points. Requires each "subsection (d) hospital" to submit data on measures selected by the Secretary in the established form, manner, and specified time. Requires the Secretary to expand the set of measures appropriate for the measurement of the quality of care furnished by hospitals in inpatient settings. Directs the Secretary, in expanding the number of such measures, to: (1) begin to adopt the baseline set of performance measures as set forth in the November 2005 report by the Institute of Medicine of the National Academy of Sciences under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003; and (2) subsequently add other measures that reflect consensus among affected parties, including measures set forth by one or more national consensus building entities. Directs the Secretary to develop a plan to implement a value based purchasing program for Medicare payments for subsection (d) hospitals beginning with FY2009. Provides that, for discharges occurring on or after October 1, 2008, the diagnosis-related group (DRG) assigned for a described discharge shall be a DRG that does not result in higher payment based on the presence of a secondary described diagnosis code. Requires a hospital to report an individual's secondary diagnosis at admission with the information submitted with respect to the individual's discharge in order for payment to be made. Requires the Secretary to select diagnosis codes associated with at least two conditions.
Section 5002 -
Permits the Secretary to include inpatient hospital days of patients eligible for medical assistance under a certain demonstration waiver in the Medicare disproportionate share hospital (DSH) adjustment calculation. Ratifies certain existing regulations.
Section 5003 -
Extends the Medicare dependent hospital (MDH) status for qualifying rural hospitals through discharges occurring before October 1, 2011. Authorizes an MDH, with respect to discharges occurring on or after October 1, 2006, to elect payments based on its FY2002 hospital-specific costs, if that would result in higher Medicare payments. Bases MDH payments on 75% (currently 50%) of their adjusted hospital-specific costs starting for discharges on October 1, 2006.
Section 5004 -
Reduces payments to skilled nursing facilities for allowable bad debts attributable to Medicare coinsurance by 30% for those individuals who are not dually eligible for Medicare and Medicaid.
Section 5005 -
Establishes the compliance threshold at: (1) 60% during the 12-month period beginning on July 1, 2006; (2) 65% during the 12-month period beginning on July 1, 2007; and (3) 75% on July 1, 2008 and subsequently. Directs the Secretary to apply such applicable percentages in the classification criterion used to determine whether a hospital or hospital unit is an inpatient rehabilitation facility for Medicare purposes.
Section 5006 -
Directs the Secretary to develop a strategic and implementing plan regarding physician investment in specialty hospitals that address issues related to proportionality of investment return, bona fide investments, annual disclosure of investment information, and the provision of Medicaid and charity care by specialty hospitals. Requires the Secretary to continue the suspension on enrollment of the new specialty hospitals until a certain time.
Section 5007 -
Directs the Secretary to establish a qualified gainsharing demonstration program for projects to: (1) test and evaluate methodologies and arrangements between hospitals and physicians designed to govern the utilization of inpatient hospital resources and physician work to improve the quality and efficiency of care provided to Medicare beneficiaries; and (2) develop improved operational and financial hospital performance with sharing of remuneration as specified in the project.
Section 5008 -
Directs the Secretary to establish a demonstration program for the purposes of understanding costs and outcomes across different post-acute care sites.
Subtitle B - Provisions Relating to Part B
Chapter 1 - Payment Provisions
Section 5101 -
Amends SSA title XVIII part B (Supplementary Medical Insurance) to: (1) require the supplier to transfer the title of durable medical equipment (DME) in the capped rental category to the beneficiary after a thirteen month rental period; (2) eliminate automatic payments to the supplier every six months for maintenance and servicing; and (3) allow reasonable and necessary payments (for parts and labor not covered by the supplier's or manufacturer's warranty). Requires the supplier of oxygen equipment (including portable oxygen equipment) to transfer the title to it to the beneficiary after a 36-month rental period. Requires payments for oxygen to continue after title transfer in the recognized amount for the period of medical need. Allows reasonable and necessary payments for maintenance and servicing of the equipment (for parts and labor not covered by the supplier's or manufacturer's warranty).
Section 5102 -
Provides that the reduced expenditures attributable to the multiple procedure payment reduction for imaging (under the final rule published November 21, 2005) shall not be taken into account for purposes of the budget neutrality calculation for 2006 and 2007. Declares that, for specified imaging services furnished on or after January 1, 2007, if the technical component (including the technical component of a global fee) exceeds the Medicare outpatient department (OPD) fee schedule amount established under the prospective payment system (PPS) for such service, the Secretary shall substitute the Medicare OPD fee schedule amount, adjusted by the relevant geographic adjustment factor.
Section 5103 -
Requires that the ambulatory care surgery center (ASC) be paid the Medicare OPD fee schedule amount whenever the ASC facility payment (without application of any geographic price differences) is greater than the Medicare OPD fee schedule amount for the same service.
Section 5104 -
Provides that the update to the single conversion factor for physicians' services for 2006 shall be 0%. Requires the Medicare Payment Advisory Commission (MedPAC) to report to Congress on mechanisms that could be used to replace the sustainable growth rate system. Makes appropriations.
Section 5105 -
Requires an increase in Medicare payments for covered OPD services in calendar 2006-2008 to non-sole community small rural hospitals with no more than 100 beds, if their OPD payments under the PPS are less than under the prior reimbursement system.
Section 5106 -
Directs the Secretary to increase the amount of the composite rate component of the basic case-mix adjusted PPS for dialysis services furnished on or after January 1, 2006, by 1.6% above the amount of such component for such services furnished on December 31, 2005.
Section 5107 -
Directs the Secretary to implement an exceptions process with respect to physical therapy, speech language pathology, and occupational therapy caps for expenses incurred in 2006. Directs the Secretary to implement clinically appropriate code edits with respect to Medicare part B payments for physical therapy services, occupational therapy services, and speech-language pathology services in order to identify and eliminate improper payments.
Chapter 2 - Miscellaneous
Section 5111 -
Revises requirements for the reduction in Medicare part B premium subsidy based on income. Increases the monthly adjustment amounts, and accelerates their phase-in for higher income enrollees, with the provision fully effective in 2009.
Section 5112 -
Authorizes Medicare coverage of ultrasound screening for abdominal aortic aneurysms for an individual meeting certain criteria. Includes ultrasound screening for abdominal aortic aneurysms in the package of services provided in the initial preventive service exam offered to new Medicare enrollees. Makes the part B deductible inapplicable to ultrasound screening for abdominal aortic aneurysm.
Section 5113 -
Makes the part B deductible inapplicable to colorectal cancer screening tests.
Section 5114 -
Adds diabetes self-management training and medical nutrition therapy services to those that may be covered under the all-inclusive per visit payment rate for federally qualified health centers (FQHCs). Allows FQHCs to receive payments for services provided through a health care professional who contracts with the center.
Section 5115 -
Permits delayed enrollment under Medicare part B without a delayed enrollment penalty to individuals who: (1) serve as volunteers outside the United States through a program sponsored by a tax-exempt organization that covers at least 12 months; and (2) demonstrate health insurance coverage while serving in the program. Creates a special six-month special part B enrollment period for such individuals, beginning on the first day of the month the individual was no longer in the program.
Subtitle C - Provisions Relating to Parts A and B
Section 5201 -
Revises requirements for home health payments, eliminating the update for home health payments in 2006. Amends the Medicare Prescription Drug, Improvement, and Modernization Act to extend through calendar 2006 the current 5% additional payment for home health episodes or visits furnished in a rural area. Requires a home health agency to submit certain quality data to the Secretary annually, or incur a 2% reduction in the fiscal year market basket update. Requires MedPAC to report to Congress on a detailed structure of value based payment adjustments for home health services under the Medicare program. Makes appropriations.
Section 5202 -
Lengthens from 26 days to 28 days after a claim is received the period during which a Medicare administrative contract for the disbursement of funds must prohibit the payment of a claim not submitted electronically.
Section 5203 -
Delays Medicare part A and B payments by nine days. (Claims that would otherwise be paid on September 22 through September 30, 2006, would be paid on the first business day of October 2006.) Prohibits payment of any interest or late penalty to an entity or individuals for any delay in a payment during the period.
Section 5204 -
Increases Medicare Integrity Program funding amounts by $100 million for FY2006.
Subtitle D - Provisions Relating to Part C
Section 5301 -
Provides for the phase-out of risk adjustment budget neutrality over 2007 through 2010 in determining the amount of payments to Medicare Advantage Organizations.
Section 5302 -
Directs the Secretary to establish a process and criteria to award site development grants to qualified Programs of All-inclusive Care for Elderly (PACE) providers that have been approved to serve a rural area. Makes appropriations for FY2006. Directs the Secretary to establish a technical assistance program to provide: (1) outreach and education to state agencies and provider organizations interested in establishing PACE programs in rural areas; and (2) such assistance necessary to support rural PACE pilot sites. Requires the Secretary to establish an outlier fund to reimburse rural PACE pilot sites for recognized outlier costs incurred for eligible outlier participants. Outlines outlier expense payments with respect to rural PACE pilot sites. Requires a rural PACE pilot site to have access and exhaust any risk reserves held or arranged for the provider and any working capital established through a site development grant awarded before receiving any payment from the outlier fund. Makes appropriations for FY2006-FY2010.
Title VI - Medicaid and SCHIP
Subtitle A - Medicaid
Chapter 1 - Payment for Prescription Drugs
Section 6001 -
- Amends SSA title XIX (Medicaid) to modify the federal upper payment limit (FUL) to 250% of the average manufacturer price (AMP) for multiple source drugs, computed without regard to prompt pay discounts extended to wholesalers. Modifies the definition of multiple source drug so that one qualifies as a multiple source drug if there is at least one other drug (instead of the current two or more) sold and marketed during the period that it is rated as therapeutically equivalent and bioequivalent. Directs the Secretary to provide on a monthly basis to states the most recently reported AMPs for both single source and multiple source drugs. Requires quarterly updates posted on a website accessible to the public. Excludes customary prompt pay discounts extended to wholesalers from the definition of AMP. Requires manufacturers to report the customary prompt pay discounts extended to wholesalers within 30 days after the last day of each rebate period. Directs the Inspector General of the Department of Health and Human Services to review and report to the Secretary of Health and Human Services and Congress on the requirements for, and manner in which, Amps are determined under the Social Security Act, with any recommendations for changes. Requires the Secretary to promulgate a regulation clarifying such requirements, taking into consideration the Inspector General's recommendations. Requires manufacturers to report information on sales of Medicaid covered drugs at a nominal price. Allows the Secretary to contract with a vendor to obtain retail survey prices for Medicaid covered outpatient drugs that represent a nationwide average of pharmacy sales costs for such drug, net of all discounts and rebates. Requires the vendor to update the Secretary at least monthly on such retail survey prices. Directs the Secretary to devise and implement a means for providing access to each state Medicaid agency to the retail survey price. Requires states to report annually to the Secretary the payment rates for all covered drugs, dispensing fees, and utilization rates for noninnovator multiple source drugs. Directs the Secretary annually to: (1) compare the national retail sales price data for the 50 most widely prescribed drugs with data on Medicaid prices for each such drug for each state; and (2) report the annual rankings to Congress and the states. Makes appropriations for FY2006-FY2010.
Section 6002 -
Requires states to provide for the collection and submission of utilization and coding information for each Medicaid single source drug, and the 20 multiple source drugs with highest dollar volume, that are physician administered. Prohibits payment for covered outpatient drugs, unless required information respecting utilization data and coding on such drugs is submitted.
Section 6003 -
Modifies the existing drug price reporting requirements to require the reporting of both the average manufacturer price and the manufacturer's best price for single source drugs, innovator multiple source drugs, and any drugs sold under a new drug application approved under the Federal Food, Drug, and Cosmetic Act.
Section 6004 -
Adds certain children's hospitals to the list of providers that may have access to certain discounted drug prices.
Chapter 2 - Long-Term Care Under Medicaid
Subchapter A: Reform of Asset Transfer Rules - Amends SSA title XIX (Medicaid) to revise requirements relating to long-term care.
Section 6011 -
Lengthens from the usual 36 months to 60 months, or five years, the look-back period for counting for eligibility purposes all income and assets disposed of by the individual for less than fair market value after this Act's enactment. Changes the start date of the ineligibility period, for all less-than-fair-market-value transfers made on or after enactment of this Act, to the first date of a month during or after which assets have been transferred, or the date on which the individual is eligible for Medicaid and would otherwise be receiving institutional level care based on an approved application but for the application of the penalty period, whichever is later, and which does not occur during any other period of ineligibility as a result of an asset transfer policy. Specifies the criteria by which an application for an undue hardship waiver shall be approved. Requires each state to provide for a hardship waiver of the transfer of assets requirement in specified circumstances for individuals residing in nursing facilities. Authorizes the state to make bed hold payments for hardship waiver applicants.
Section 6012 -
Requires a state to require an individual, upon application for or recertification of medical assistance for LTC services, to disclose to the state any interest the individual or community spouse has in an annuity (or similar financial instrument), regardless of whether the annuity is irrevocable or is treated as an asset. Requires the state to notify the annuity's issuer of the state's right as a preferred remainder beneficiary for Medicaid assistance furnished to the individual. Requires treatment of the purchase of an annuity as the disposal of an asset for less than fair market value unless the state is named: (1) as the remainder beneficiary in the first position for at least the total amount of Medicaid expenditures paid on the annuitant's behalf; or (2) as such a beneficiary in the second position after the community spouse or minor or disabled child, and is named in the first position if such spouse or a representative of such child disposes of any such remainder for less than fair market value. Treats as an asset subject to transfer penalties any annuity purchased by or on behalf of an applicant for a Medicaid-covered nursing facility or other LTC services, unless it meets one or the other of specified requirements, including absence of a deferral or balloon payments.
Section 6013 -
Revises requirements for treatment of income and resources for certain institutionalized spouses. Requires states to consider that all income of the institutionalized spouse that could be made available to a community spouse, in accordance with the calculation of the community spouse monthly income allowance, has been made available ("income first" rule) before the state allocates to the community spouse an allowance of resources adequate to provide the difference between the minimum monthly maintenance needs allowance and all income available to the community spouse.
Section 6014 -
Makes ineligible for Medicaid for nursing facility or other LTC services certain individuals with an equity interest in their homes greater than $500,000. Allows a state to elect an equity interest threshold exceeding $500,000, but not more than $750,000. Indexes such dollar amounts for inflation, beginning with 2011.
Section 6015 -
Authorizes state-licensed, registered, certified, or equivalent continuing care retirement communities (CCRCs) or life care communities (including related nursing facility services) to require in their admissions contracts that residents spend their resources on their care before applying for Medicaid. Treats an entrance fee in a CCRC or life care community as a resource for purposes of determining Medicaid eligibility in specified circumstances.
Section 6016 -
Revises Medicaid asset transfer rules. Prohibits a state from rounding down or otherwise disregarding any fractional period of ineligibility with respect to the disposal of assets when determining the ineligibility period for Medicaid long-term care services. Authorizes states to accumulate multiple assets transfers into one penalty period. Includes among assets: (1) funds used to purchase a promissory note, loan, or mortgage, except under certain conditions; and (2) the purchase of a life estate interest in another individual's home, unless the purchaser resides in the home for at least one year after the date of purchase. Subchapter B: Expanded Access to Certain Benefits -
Section 6021 -
Exempts an individual who received medical assistance under a State plan with an amendment providing for a qualified state long-term care (LTC) insurance partnership from the requirement that the state seek adjustment or recovery from the individual's estate on account of medical assistance paid on behalf of the individual for nursing facility and other long-term care services. Declares that a qualified state LTC insurance partnership disregards any assets or resources equal in amount to LTC insurance benefit payments made, if the insurance policy meets certain requirements. Directs the Secretary to develop standards for uniform reciprocal recognition of qualified state LTC insurance partnership policies among states with such partnerships. Directs the Secretary to establish a National Clearinghouse for Long-Term Care Information. Makes appropriations for FY2006-FY2010.
Chapter 3 - Eliminating Fraud, Waste, and Abuse in Medicaid
Section 6032 -
Provides that, if a state has in effect a law relating to false or fraudulent claims that meets certain requirements, the federal medical assistance percentage (FMAP), with respect to any amounts recovered under a state action brought under such law, shall be decreased by 10 percentage points.
Section 6033 -
Requires state plans for medical assistance to require entities receiving annual Medicaid payments of at least $5 million to establish written policies for all employees with respect to the False Claims Act and associated administrative remedies for false claims and statements.
Section 6034 -
Prohibits federal matching payments for the ingredient cost of a covered outpatient drug for which the pharmacy has already received payment (other than a reasonable restocking fee).
Section 6035 -
Establishes the Medicaid Integrity Program under which the Secretary shall promote the integrity of the Medicaid program by entering into contracts with eligible entities to carry out specified activities, including: (1) a review of the actions of individuals or entities furnished items or services for which Medicaid payment may be made to determine whether fraud, waste, or abuse has occurred; and (2) an audit of claims for payment for items or services furnished under a state Medicaid plan. Makes appropriations for FY2006 and following fiscal years. Provides for increased funding for Medicaid fraud and abuse control activities of the Office of the Inspector General of the Department of Health and Human Services for FY2006-FY2010. Directs the Secretary to enter into contracts with eligible entities for the purpose of ensuring that, beginning with 2006, the Medicare-Medicaid Data Match Program (Medi-Medi Program) is conducted to identify vulnerabilities of the Medicare and state Medicaid programs, and work with states, the Attorney General, and the Inspector General of the Department of Health and Human Services to coordinate appropriate actions to protect the federal and state share of expenditures under such programs. Makes appropriations for FY2006-FY2010 and following fiscal years for the Medi-Medi Program.
Section 6036 -
Amends the list of third parties legally responsible for payment of a claim for a health care item or service for which states must take all reasonable measures to ascertain the legal liability to: (1) substitute the term "managed care organization" for "health maintenance organization;" and (2) include self-insured plans, pharmacy benefit managers, and other parties that are legally responsible for payment of a claim for a health care item or service. Requires a state to provide assurances satisfactory to the Secretary that it has laws in effect requiring health insurers, as a condition of doing business in the state, to: (1) provide, upon state request, information to determine during what period the individual or spouses or dependents may be (or may have been) covered by a health insurer, and the nature of that coverage; (2) accept the state's right of recovery and the assignment to the state of any right of an individual or other entity to payment from the party for an item or service paid for under the state plan; (3) respond to any state inquiry regarding a claim submitted within three years after provision of an item or service; and (4) agree not to deny a claim submitted by the state solely on the basis of date of submission, type or format of claim form, or failure to present proper documentation at point-of-sale, if certain procedural deadlines are met.
Section 6037 -
Prohibits Medicaid assistance to an individual who declares he or she is a U.S. citizen unless one example of specified kinds of documentary evidence of citizenship or nationality is presented. Directs the Secretary to establish an outreach program designed to educate individuals likely to be affected by such requirements.
Chapter 4 - Flexibility in Cost Sharing and Benefits
Section 6041 -
Authorizes a state to impose varied alternative Medicaid premiums and cost-sharing for different income groups of individuals, subject to specified limitations.
Section 6042 -
Sets forth special rules for state-determined cost-sharing for the least (or less) costly effective prescription drugs.
Section 6043 -
Gives states the option of permitting hospitals to impose cost-sharing for non-emergency care furnished in an emergency department, if certain conditions are met. Directs the Secretary to provide for payments to states for the establishment of alternative non-emergency service providers or provider networks.
Section 6044 -
Allows states, at their option through a state plan amendment, to provide Medicaid benefits to certain groups of beneficiaries through benchmark coverage (federal employee health benefit standard Blue Cross/Blue Shield preferred provider option service benefit plan, state employee health benefit plan, or certain health maintenance organization (HMO) plans). Specifies groups who may not be required to enroll in benchmark coverage, including certain pregnant women, blind or disabled individuals, dual eligibles, medically frail and special medical needs individuals, certain children in foster care, TANF parents, and women in the breast or cervical cancer program.
Chapter 5 - State Financing under Medicaid
Section 6051 -
Expands the Medicaid managed care organization (MCO) provider class to include all MCOs.
Section 6052 -
Specifies the meaning of case management services in terms of the development of a specific care plan, including referral and monitoring and related activities, based on the information collected through an assessment. Defines targeted case management services (TCM) as those furnished, without regard to certain requirements, to specific classes of individuals or to individuals who reside in specific areas.
Section 6053 -
Provides that if, for purposes of SSA titles XIX and XXI (State Children's Health Insurance Program) (SCHIP), the FMAP determined for Alaska for FY2006 or FY2007 is less than the FMAP determined for FY2005, the FY2005 FMAP shall be substituted for the FY2006 or FY2007 FMAP, as the case may be. Requires the Secretary, in computing the FMAP for any year after 2006 for a state with a significant number of Hurricane Katrina evacuees as of October 1, 2005, to disregard such evacuees (and income attributable to them) from such computation.
Section 6054 -
Revises the formula for calculation of the disproportionate share (DSH) allotment for the District of Columbia for FY2000-FY2002.
Section 6055 -
Amends SSA title XI to increase the FY2006-FY2007 total annual caps on federal spending for the Medicaid programs in Puerto Rico, the Virgin Islands, Guam, the Northern Marianas, and American Samoa.
Chapter 6 - Other Provisions
Subchapter A: Family Opportunity Act - Family Opportunity Act of 2005, or the Dylan Lee James Act -
Section 6062 -
Amends SSA title XIX to give states the option to: (1) allow families of disabled children to purchase Medicaid coverage for such children; and (2) impose income-related premiums with respect to such children provided medical assistance
Section 6063 -
Authorizes the Secretary to conduct, during each of FY2007-FY2011, demonstration projects under which up to ten states are awarded grants, on a competitive basis, to test the effectiveness in improving or maintaining a child's functional level, as well as the cost-effectiveness, of covering home and community-based alternatives to psychiatric residential treatment for children enrolled in the Medicaid program. Makes appropriations for FY2007-FY2011.
Section 6064 -
Amends SSA title V (Maternal and Child Health Services) to make appropriations for FY2007-FY2009 for the development and support of family-to-family health information centers under SPRANS (Special Projects of Regional and National Significance).
Section 6065 -
Extends Medicaid eligibility to persons who are under age 21 and who are eligible for SSI (Supplemental Security Income) under SSA title XVI, effective on the later of: (1) the date the application was filed: or (2) the date SSI eligibility was granted. Subchapter B: Money Follows the Person Rebalancing Demonstration -
Section 6071 -
Authorizes the Secretary to award, on a competitive basis, grants to states for (Money Follows the Person, or MFP) demonstration projects designed to achieve certain objectives, including rebalancing, that is, increasing the use of home and community-based, rather than institutional, long-term care services under state Medicaid programs. Makes appropriations for FY2007-FY2011. Subchapter C: Miscellaneous -
Section 6081 -
Directs the Secretary to provide for payments to states for the adoption of innovative methods to improve the effectiveness and efficiency in providing medical assistance under Medicaid.
Section 6082 -
Directs the Secretary to establish a five-year demonstration program under which up to 10 states may provide under their state Medicaid plans for alternate benefits (including contributions to a health opportunity account) for eligible population groups in one or more geographic areas of the state.
Section 6083 -
Gives states the option of providing for establishment of a non-emergency medical transportation brokerage program in order more cost-effectively to provide transportation for Medicaid-eligible individuals to medical care or services.
Section 6084 -
Extends the Transitional Medical Assistance and the abstinence education block grant programs through December 31, 2006.
Section 6085 -
Requires any provider of emergency services that does not have in effect a contract with a Medicaid managed care entity to accept as payment in full no more than it could collect if the beneficiary received medical assistance other than through enrollment in such entity. Specifies a payment formula for a state where rates are negotiated by contract and not publicly released.
Section 6086 -
Provides for home and community-based services as an optional benefit for elderly and disabled individuals.
Section 6087 -
Allows a state to provide as "medical assistance" payment for self-directed personal assistance services pursuant to a written plan of care to individuals who would otherwise require and receive Medicaid personal care services, or home and community-based services under a waiver.
Subtitle B - SCHIP
Section 6101 -
Amends SSA title XXI (SCHIP) to provide for additional allotments to states to eliminate FY2006 funding shortfalls.
Section 6102 -
Prohibits a waiver, experimental, pilot, or demonstration project from allowing the use of funds to provide child health assistance to nonpregnant childless adults.
Section 6103 -
Continues through FY2004-FY2005 the authority for qualifying states to apply federal SCHIP matching funds toward the coverage of certain children enrolled in regular Medicaid.
Subtitle C - Katrina Relief
Section 6201 -
Appropriates $2 billion (in addition to any funds made available for the National Disaster Medical System under the Department of Homeland Security for health care costs related to Hurricane Katrina) for use by the Secretary to pay eligible states for: (1) the nonfederal share of expenditures with respect to evacuees receiving health care under an approved Multi-State Section 115 Demonstration Project; (2) reimbursement of the reasonable administrative costs related to such projects; (3) reimbursement of the nonfederal share of expenditures for medical care provided to individuals under Medicaid and SCHIP plans; and (4) other purposes, if approved by the Secretary, to restore access to health care in impacted communities.
Section 6202 -
Authorizes and makes appropriations for FY2006 grants to states for: (1) up to half the losses incurred by a state in connection with the operation of their high risk pool; and (2) seed money to create and initially fund a high risk pool.
Title VII - Human Resources and Other Provisions
Subtitle A - TANF
Section 7101 -
Amends SSA title IV part A (Temporary Assistance for Needy Families) (TANF) to extend the TANF program at the FY2004 level through FY2010. Makes appropriations. Extends the National Random Sample Study of Child Welfare through FY2010.
Section 7102 -
Revises the formula for the caseload reduction credit with respect to work participation rates. Includes families receiving assistance under separate state programs in the calculation of work participation rates. Directs the Secretary to promulgate regulations for determining whether activities may be counted as work activities, how to count and verify reported hours of work, and work-eligible individuals. Provides for a state penalty for failure to establish or comply with work participation verification procedures.
Section 7103 -
Replaces incentive bonuses to states for a decrease in the illegitimacy rate with healthy marriage promotion and responsible fatherhood grants. Limits the use of funds for: (1) demonstration projects designed to test the effectiveness of tribal governments or consortia in coordinating the provision of child welfare services to tribal families at risk of child abuse or neglect; and (2) activities promoting responsible fatherhood. Makes appropriations for FY2006-FY2010.
Subtitle B - Child Care
Section 7201 -
Makes appropriations for FY2006-FY2010 for entitlement grants to states for child care.
Subtitle C - Child Support
Section 7301 -
Modifies the rule requiring assignment of support rights as a condition of receiving TANF. Revises requirements for the distribution of arrearages with respect to families that formerly received TANF. Declares that states shall not be required to pay the federal government the federal share of amounts collected on behalf of a family: (1) that formerly received TANF, to the extent that the state pays (passes through) the amount to the family; or (2) that currently receives assistance, to the extent of a certain portion passed through to the family. Requires the State plan to include an election as to which rules, new or old, to apply in distributing child support arrearages collected on behalf of families formerly receiving assistance. Gives States the option to discontinue pre-1997 support assignments, and to discontinue post-1997 assignments. Revises requirements for use of the tax refund intercept program to collect past-due child support on behalf of children who are not minors. Gives states assisting other states the option to use their statewide automated data processing and information retrieval system for interstate cases.
Section 7302 -
Revises requirements for the mandatory three-year review and adjustment of child support orders for families receiving TANF. Eliminates the state's dependence on a request of the state agency or of either parent to conduct such a review, if there has been an assignment to the state of rights to collect child support on behalf of a child. (Requires the state, in the case of an assignment, to conduct such a review and adjustment.)
Section 7303 -
Reduces from $5,000 to $2,500 the amount of a child support arrearage triggering referral for passport denial of the parent responsible for the arrearage.
Section 7304 -
Revises the formula for the permanent appropriation of funds for: (1) technical assistance to states, training of state and federal staff, staffing studies, and related activities needed to improve child support and paternity establishment programs; and (2) research, demonstration, and special projects of regional or national significance relating to the operation of such state programs. Appropriates the greater of the preceding fiscal year appropriation or the FY2002 appropriation.
Section 7305 -
Revises the formula for the permanent appropriation of funds for the Federal Parent Locator Service. Appropriates the greater of the preceding fiscal year appropriation or the FY2002 appropriation. Repeals the fiscal year limitation to make permanent the continuing availability of appropriations until they are expended.
Section 7306 -
Authorizes the Secretary, through the Federal Parent Locator Service, to: (1) compare information concerning individuals owning past-due support with information maintained by insurers (or their agents) concerning insurance claims, settlements, awards, and payments; and (2) furnish information resulting from the data matches to the state agencies responsible for collection child support from the individuals.
Section 7307 -
Requires that all child support orders include a provision for medical support for children to be provided by either or both parents, and be enforced.
Section 7308 -
Reduces from 90% to 66% the federal matching rate for laboratory costs incurred in determining paternity.
Section 7309 -
Ends federal matching of state spending of federal incentive payments.
Section 7310 -
Provides for a mandatory annual fee of $25 for each case of successful child support collection for a family that has never received TANF, if the state collects more than $500.
Subtitle D - Child Welfare Authority
Section 7401 -
Prescribes the contents of applications for court improvement grants, including grants for improved data collection and training. Makes appropriations for FY2006-FY2010 for grants to: (1) ensure that the safety, permanence, and well-being needs of children are met in a timely and complete manner; and (2) provide for the training of judges, attorneys, and other legal personnel in child welfare cases. Requires that courts and agencies demonstrate meaningful collaboration between them in child welfare services programs. Provides for the use of child welfare records in state court proceedings.
Section 7402 -
Authorizes appropriations for FY2006 for safe and stable families programs.
Section 7403 -
Specifies criteria for the foster care circumstances of otherwise federally eligible children living with unlicensed relatives, in another ineligible setting, or who have not yet entered foster care, where the state may receive federal matching funds for the associated administrative expenditures.
Section 7404 -
Revises eligibility requirements for foster care maintenance payments and adoption assistance.
Subtitle E - Supplemental Security Income
Section 7501 -
Amends SSA title XVI (Supplemental Security Income) (SSI) to direct the Commissioner, before taking any implementing action, to review state agency determinations that individuals who have attained age 18 are blind or disabled.
Section 7502 -
Revises the formula for determining eligibility of individuals to installment payment of past-due monthly SSI benefits.
Subtitle F - Repeal of Continued Dumping and Subsidy Offset
Section 7601 -
Amends the Tariff Act of 1930 to repeal the continued dumping and subsidy offset.
Subtitle G - Effective Date
Section 7701 -
Sets forth the effective date of this title.
Title VIII - Education and Pension Benefit Provisions
Subtitle A - Higher Education Provisions
Higher Education Reconciliation Act of 2005 - Amends the Higher Education Act of 1965 (HEA) to revise title IV student assistance program requirements.
Section 8002 -
Eliminates the 50% rule with respect to distance education, where it currently limits the relative number of courses an institution of higher education (IHE) may offer by telecommunications, and the relative number of students who may be enrolled in such courses, for purposes of student assistance program eligibility. (Continues application of the 50% rule to correspondence courses.)
Section 8003 -
Establishes a program of: (1) academic competitiveness grants for first and second year undergraduate students; and (2) national science and mathematics access to retain talent (SMART) grants for third and fourth year undergraduate students of physical, life, or computer sciences, mathematics, technology, engineering, or critical foreign languages. Establishes the Academic Competitiveness Council.
Section 8004 -
Reauthorizes the Federal Family Education Loan (FFEL) program. Extends authority for federal insurance on student loans, and for the guaranteed loan and consolidated loan programs. Refers to loan processing and issuance fees rather than an administrative cost allowance.
Section 8005 -
Increases loan limits.
Section 8006 -
Increases PLUS loan interest rates. Establishes a special allowance support level to be used in a formula for calculating excess interest to be recaptured by the Treasury.
Section 8007 -
Provides for student loan deferments of up to three years for individuals serving on active duty or performing National Guard duty during a war or other military operation or emergency.
Section 8008 -
Revises loan terms and conditions relating to: (1) disbursement to students studying abroad; and (2) repayment plans for direct loans. Provides for gradual reduction of loan origination fees paid by student borrowers under the FFEL program.
Section 8009 -
Revises consolidation loan requirements. Requires the Secretary of Education (the Secretary, under this title) to offer direct consolidation loans to eligible borrowers who have been denied consolidation loans or consolidation loans with income-sensitive repayment terms by an eligible lender. Eliminates in-school consolidation loans. Provides for similar terms and conditions for FFEL consolidation loans and DL consolidations loans.
Section 8010 -
Revises requirements for disbursements of student loans.
Section 8011 -
Revises requirements for IHEs as lenders.
Section 8013 -
Continues certain limitations on special allowance payments under HEA, as amended by the Taxpayer-Teacher Protection Act of 2004 (TTPA), by eliminating specified TTPA termination dates. Prescribes an additional limitation on special allowance payments for loans from the proceeds of tax-exempt issues. Continues TTPA authorization of an increased maximum amount, and new borrower eligibility, for HEA's loan forgiveness program for school teachers who teach certain subjects in high-poverty schools. Sets guidelines for private school teachers to qualify for such forgiveness program.
Section 8014 -
Establishes a limited federal default fee. Revises administrative requirements for: (1) insurance percentage; (2) treatment of exempt claims; (3) consolidation of defaulted loans; (4) documentation of forbearance agreements; (5) voluntary flexible agreements; (6) the default reduction program; (7) exceptional performance insurance rate; and (8) uniform administrative and claims procedure.
Section 8015 -
Provides for mandatory funds for FY2006 to be available to the Secretary in a specified limited amount for: (1) administrative costs under the DL and FFEL student loan programs; and (2) account maintenance fees payable to guaranty agencies under FFEL. Authorizes appropriations, but eliminates mandatory funding, for such administrative expenses in FY2007-FY2011. Continues mandatory funding for FY2007-FY2011 for account maintenance fees payable to guaranty agencies under FFEL. Limits such fees to not more than 0.1% of the original principal amount of outstanding loans on which insurance was issued under FFEL.
Section 8016 -
Revises cost of attendance and family contribution requirements.
Section 8018 -
Revises guidelines for determining a student's eligibility for the simplified needs test (SNT) and automatic-zero expected family contribution (AZ-EFC).
Section 8019 -
Revises need analysis requirements to treat active duty members of the military as independent students. Exempts from consideration assets from any small business with 100 or fewer full-time or full-time equivalent employees that is owned or controlled by the family. Excludes consideration of certain assistance provided by a state to offset a specific component of the cost of attendance, under specified conditions.
Section 8020 -
Makes eligible for student assistance distance education, including certain instructional programs that use or recognize direct assessment of student learning in place of credit hours or clock hours as the measure of student learning.
Section 8021 -
Requires any student who has pled guilty or no contest to (or been convicted of) a crime involving fraud in obtaining title IV funds to repay the funds in full to the Secretary or loan holder before being considered eligible again. Specifies that a conviction for a drug-related offense affects a student's title IV eligibility only if it occurs during the period when the student is enrolled and receiving title IV student aid.
Section 8022 -
Revises requirements relating to institutional refunds.
Section 8023 -
Establishes a college access initiative. Directs the Secretary to require each guaranty agency to gather information on programs and student aid available in the state in which it is designated. Requires such information to be made available for free to the public, particularly to traditionally underrepresented populations, via web sites, publications, and other state services.
Section 8023 -
Increases, from 10% to 15%, the maximum portion of disposable wages for any pay period which may be garnished to repay a student loan under HEA (unless the individual consents to a greater portion).
Subtitle B - Pensions
Amends the Employee Retirement Income Security Act of 1974 (ERISA) to increase annual premiums to be paid to the Pension Benefit Guaranty Corporation (PBGC) by single-employer plans and by multiemployer plans, respectively. Sets forth a premium rate for certain terminated single-employer plans, with a special rule for plans terminated in bankruptcy reorganization.
Title IX - LIHEAP Provisions
Section 9001 -
Appropriates to the Secretary of Health and Human Services for one-time only obligation and expenditure for low-income energy assistance: (1) $250 million for FY2007; and (2) $750 million for FY2007. Prescribes allocation guidelines.
Title X - Judiciary Related Provisions
Subtitle A - Civil Filing Adjustments
Section 10001 -
Amends the federal judicial code to increase from $250 to: (1) $350 the filing fee for civil actions filed in district courts; and (2) $450 the fee for docketing a case on appeal or review, or any other proceeding in a court of appeals.
Subtitle B - Bankruptcy Fees
Section 10002 -
Increases bankruptcy filing fees: (1) from $220 to $245 for cases commenced under chapter 7 (Liquidation); and (2) from $150 to $235 for cases commenced under chapter 13 (Adjustment of debts of an individual with regular income). Requires that incremental amounts collected by reason of increased civil filing fees and bankruptcy filing fees be deposited in a special fund in the Treasury, to be available to offset funds appropriated for the operation and maintenance of the federal courts. Requires MedPAC to report to Congress on a detailed structure of value based payment adjustments for home health services under the Medicare program. Makes appropriations.
Section 5202 -
Lengthens from 26 days to 28 days after a claim is received the period during which a Medicare administrative contract for the disbursement of funds must prohibit the payment of a claim not submitted electronically.
Section 5203 -
Delays Medicare part A and B payments by nine days. (Claims that would otherwise be paid on September 22 through September 30, 2006, would be paid on the first business day of October 2006.) Prohibits payment of any interest or late penalty to an entity or individuals for any delay in a payment during the period.
Section 5204 -
Increases Medicare Integrity Program funding amounts by $100 million for FY2006.
Subtitle D - Provisions Relating to Part C
Section 5301 -
Provides for the phase-out of risk adjustment budget neutrality over 2007 through 2010 in determining the amount of payments to Medicare Advantage Organizations.
Section 5302 -
Directs the Secretary to establish a process and criteria to award site development grants to qualified (PACE) providers that have been approved to serve a rural area. Makes appropriations for FY2006. Directs the Secretary to establish a technical assistance program to provide: (1) outreach and education to state agencies and provider organizations interested in establishing PACE programs in rural areas; and (2) such assistance necessary to support rural PACE pilot sites. Requires the Secretary to establish an outlier fund to reimburse rural PACE pilot sites for recognized outlier costs incurred for eligible outlier participants. Outlines outlier expense payments with respect to rural PACE pilot sites. Requires a rural PACE pilot site to have access and exhaust any risk reserves held or arranged for the provider and any working capital established through a site development grant awarded before receiving any payment from the outlier fund. Makes appropriations for FY2006-2010.
Title VI - Medicaid and SCHIP
Subtitle A - Medicaid
Chapter 1 - Payment for Prescription Drugs
Section 6001 -
- Amends SSA title XIX (Medicaid) to modify the federal upper payment limit (FUL) to 250% of the average manufacturer price (AMP) for multiple source drugs, computed without regard to prompt pay discounts extended to wholesalers. Modifies the definition of multiple source drug so that one qualifies as a multiple source drug if there is at least one other drug (instead of the current two or more) sold and marketed during the period that it is rated as therapeutically equivalent and bioequivalent. Directs the Secretary to provide on a monthly basis to states the most recently reported AMPs for both single source and multiple source drugs. Requires quarterly updates posted on a website accessible to the public. Excludes customary prompt pay discounts extended to wholesalers from the definition of AMP. Requires manufacturers to report the customary prompt pay discounts extended to wholesalers within 30 days after the last day of each rebate period. Directs the Inspector General of the Department of Health and Human Services to review and report to the Secretary of Health and Human Services and Congress on the requirements for, and manner in which, AMPs are determined under the Social Security Act, with any recommendations for changes. Requires the Secretary to promulgate a regulation clarifying such requirements, taking into consideration the Inspector General's recommendations. Requires manufacturers to report information on sales of Medicaid covered drugs at a nominal price. Allows the Secretary to contract with a vendor to obtain retail survey prices for Medicaid covered outpatient drugs that represent a nationwide average of pharmacy sales costs for such drug, net of all discounts and rebates. Requires the vendor to update the Secretary at least monthly on such retail survey prices. Directs the Secretary to devise and implement a means for providing access to each state Medicaid agency to the retail survey price. Requires states to report annually to the Secretary the payment rates for all covered drugs, dispensing fees, and utilization rates for noninnovator multiple source drugs. Directs the Secretary annually to: (1) compare the national retail sales price data for the 50 most widely prescribed drugs with data on Medicaid prices for each such drug for each state; and (2) report the annual rankings to Congress and the states.Makes appropriations for FY2006-FY2010.
Section 6002 -
Requires states to provide for the collection and submission of utilization and coding information for each Medicaid single source drug, and the 20 multiple source drugs with highest dollar volume, that are physician administered. Prohibits payment for covered outpatient drugs, unless required information respecting utilization data and coding on such drugs is submitted.
Section 6003 -
Modifies the existing drug price reporting requirements to require the reporting of both the average manufacturer price and the manufacturer's best price for single source drugs, innovator multiple source drugs, and any drugs sold under a new drug application approved under the Federal Food, Drug, and Cosmetic Act.
Section 6004 -
Adds certain children's hospitals to the list of providers that may have access to certain discounted drug prices.
Chapter 2 - Long-Term Care Under Medicare
Subchapter A: Reform of Asset Transfer Rules - Amends SSA title XIX (Medicaid) to revise requirements relating to long-term care.
Section 6011 -
Lengthens from the usual 36 months to 60 months, or five years, the look-back period for counting for eligibility purposes all income and assets disposed of by the individual for less than fair market value after this Act's enactment. Changes the start date of the ineligibility period, for all less-than-fair-market-value transfers made on or after enactment of this Act, to the first date of a month during or after which assets have been transferred, or the date on which the individual is eligible for Medicaid and would otherwise be receiving institutional level care based on an approved application but for the application of the penalty period, whichever is later, and which does not occur during any other period of ineligibility as a result of an asset transfer policy. Specifies the criteria by which an application for an undue hardship waiver shall be approved. Requires each state to provide for a hardship waiver of the transfer of assets requirement in specified circumstances for individuals residing in nursing facilities. Authorizes the state to make bed hold payments for hardship waiver applicants.
Section 6012 -
Requires a state to require an individual, upon application or recertification of medical assistance for LTC services, to disclose to the state any interest the individual or community spouse has in an annuity (or similar financial instrument), regardless of whether the annuity is irrevocable or is treated as an asset. Requires the state to notify the annuity's issuer of the state's right as a preferred remainder beneficiary for Medicaid assistance furnished to the individual. Requires treatment of the purchase of an annuity as the disposal of an asset for less than fair market value unless the state is named: (1) as the remainder beneficiary in the first position for at least the total amount of Medicaid expenditures paid on the annuitant's behalf; or (2) as such a beneficiary in the second position after the community spouse or minor or disabled child, and is named in the first position if such spouse or a representative of such child disposes of any such remainder for less than fair market value. Treats as an asset subject to transfer penalties any annuity purchased by or on behalf of an applicant for a Medicaid-covered nursing facility or other long-term care services, unless it meets one or the other of specified requirements, including absence of a deferral or balloon payments.
Section 6013 -
Revises requirements for treatment of income and resources for certain institutionalized spouses. Requires states to consider that all income of the institutionalized spouse that could be made available to a community spouse, in accordance with the calculation of the community spouse monthly income allowance, has been made available ("income first" rule) before the state allocates to the community spouse an allowance of resources adequate to provide the difference between the minimum monthly maintenance needs allowance and all income available to the community spouse.
Section 6014 -
Makes ineligible for Medicaid for nursing facility or other LTC services certain individuals with an equity interest in their homes greater than $500,000. Allows a state to elect an equity interest threshold exceeding $500,000, but not more than $750,000. indexes such dollar amounts for inflation, beginning with 2011.
Section 6015 -
Authorizes state-licensed, registered, certified, or equivalent continuing care retirement communities (CCRCs) or life care communities (including related nursing facility services) to require in their admissions contracts that residents spend their resources on their care before applying for Medicaid. Treats an entrance fee in a CCRC or life care community as a resource, for purposes of determining Medicaid eligibility, in specified circumstances.
Section 6016 -
Revises Medicaid asset transfer rules. Prohibits a state from rounding down or otherwise disregarding any fractional period of ineligibility with respect to the disposal of assets when determining the ineligibility period for Medicaid long-term care services. Authorizes states to accumulate multiple assets transfers into one penalty period. Includes among assets: (1) funds used to purchase a promissory note, loan, or mortgage, except under certain conditions; and (2) the purchase of a life estate interest in another individual's home, unless the purchaser resides in the home for at least one year after the date of purchase. Subchapter B: Expanded Access to Certain Benefits -
Section 6021 -
Exempts an individual who received medical assistance under a State plan with an amendment providing for a qualified state long-term care (LTC) insurance partnership from the requirement that the state seek adjustment or recovery from the individual's estate on account of medical assistance paid on behalf of the individual for nursing facility and other long-term care services. Declares that a qualified state LTC insurance partnership disregards any assets or resources equal in amount to LTC insurance benefit payments made, if the insurance policy meets certain requirements. Directs the Secretary to develop standards for uniform reciprocal recognition of qualified state LTC insurance partnership policies among states with such partnerships. Directs the Secretary to establish a National Clearinghouse for Long-Term Care Information. Makes appropriations for FY2006-FY2010.
Chapter 3 - Eliminating Fraud, Waste, and Abuse in Medicaid
Section 6032 -
Provides that, if a state has in effect a law relating to false or fraudulent claims that meets certain requirements, the federal medical assistance percentage (FMAP), with respect to any amounts recovered under a state action brought under such law, shall be decreased by 10 percentage points.
Section 6033 -
Requires state plans for medical assistance to require entities receiving annual Medicaid payments of at least $5 million to establish written policies for all employees with respect to the False Claims Act and associated administrative remedies for false claims and statements.
Section 6034 -
Prohibits federal matching payments for the ingredient cost of a covered outpatient drug for which the pharmacy has already received payment (other than a reasonable restocking fee).
Section 6035 -
Establishes the Medicaid Integrity Program under which the Secretary shall promote the integrity of the Medicaid program by entering into contracts with eligible entities to carry out specified activities, including: (1) a review of the actions of individuals or entities furnished items or services for which Medicaid payment may be made to determine whether fraud, waste, or abuse has occurred; and (2) an audit of claims for payment for items or services furnished under a state Medicaid plan. Makes appropriations for FY2006 and following fiscal years. Provides for increased funding for Medicaid fraud and abuse control activities of the Office of the Inspector General of the Department of Health and Human Services for FY2006-FY2010. Directs the Secretary to enter into contracts with eligible entities for the purpose of ensuring that, beginning with 2006, the Medicare-Medicaid Data Match Program (Medi-Medi Program) is conducted to identify vulnerabilities of the Medicare and state Medicaid programs, and work with states, the Attorney General, and the Inspector General of the Department of Health and Human Services to coordinate appropriate actions to protect the federal and state share of expenditures under such programs. Makes appropriations for FY2006-FY2010 and following fiscal years for the Medi-Medi Program.
Section 6036 -
Amends the list of third parties legally responsible for payment of a claim for a health care item or service for which states must take all reasonable measures to ascertain the legal liability to: (1) substitute the term "managed care organization" for "health maintenance organization;" and (2) include self-insured plans, pharmacy benefit managers, and other parties that are legally responsible for payment of a claim for a health care item or service. Requires a state to provide assurances satisfactory to the Secretary that it has laws in effect requiring health insurers, as a condition of doing business in the state, to: (1) provide, upon state request, information to determine during what period the individual or spouses or dependents may be (or may have been) covered by a health insurer, and the nature of that coverage; (2) accept the state's right of recovery and the assignment to the state of any right of an individual or other entity to payment from the party for an item or service paid for under the state plan; (3) respond to any state inquiry regarding a claim submitted within three years after provision of an item or service; and (4) agree not to deny a claim submitted by the state soley on the basis of date of submission, type or format of claim form, or failure to present proper documentation at point-of-sale, if certain procedural deadlines are met.
Section 6037 -
Prohibits Medicaid assistance to an individual who declares he or she is a U.S. citizen unless one example of specified kinds of documentary evidence of citizenship or nationality is presented. Directs the Secretary to establish an outreach progran designed to educate individuals likely to be affected by such requirements.
Chapter 4 - Flexibility in Cost Sharing and Benefits
Section 6041 -
Authorizes a state to impose varied alternative Medicaid premiums and cost-sharing for different income groups of individuals, subject to specified limitations.
Section 6042 -
Sets forth special rules for state-determined cost-sharing for the least (or less) costly effective prescription drugs.
Section 6043 -
Gives states the option of permitting hospitals to impose cost-sharing for non-emergency care furnished in an emergency department, if certain conditions are met. Directs the Secretary to provide for payments to states for the establishment of alternative non-emergency service providers or provider networks.
Section 6044 -
Allows states, at their option through a state plan amendment, to provide Medicaid benefits to certain groups of beneficiaries through benchmark coverage (federal employee health benefit standard Blue Cross/Blue Shield preferred provider option service benefit plan, state employee health benefit plan, or certain health maintenance organization (HMO) plans). Specifies groups who may not be required to enroll in benchmark coverage, including certain pregnant women, blind or disabled individuals, dual eligibles, medically frail and special medical needs individuals, certain children in foster care, TANF parents, and women in the breast or cervical cancer program.
Chapter 5 - State Financing under Medicare
Section 6051 -
Expands the Medicaid managed care organization (MCO) provider class to include all MCOs.
Section 6052 -
Specifies the meaning of case management services in terms of the development of a specific care plan, including referral and monitoring and related activites, based on the information collected through an assessment. Defines targeted case management services (TCM) as those furnished, without regard to certain requirements, to specific classes of individuals or to individuals who reside in specific areas.
Section 6053 -
Provides that if, for purposes of SSA titles XIX and XXI (State Children's Health Insurance Program) (SCHIP), the federal medical assistance percentage (FMAP) determined for Alaska for FY2006 or FY2007 is less than the FMAP determined for FY2005, the FY2005 FMAP shall be substituted for the FY2006 or FY2007 FMAP, as the case may be. Requires the Secretary, in computing the FMAP for any year after 2006 for a state with a significant number of Hurricane Katrina evacuees as of October 1, 2005, to disregard such evacuees (and income attributable to them) from such computation.
Section 6054 -
Revises the formula for calculation of the disproportionate share (DSH) allotment for the District of Columbia for FY2000-FY2002.
Section 6055 -
Amends SSA title XI to increase the FY2006-FY2007 total annual caps on federal spending for the Medicaid programs in Puerto Rico, the Virgin Islands, Guam, the Northern Marianas, and American Samoa.
Chapter 6 - Other Provisions
Subchapter A: Family Opportunity Act - Family Opportunity Act of 2005, or the Dylan Lee James Act -
Section 6062 -
Amends SSA title XIX to give states the option to: (1) allow families of disabled children to purchase Medicaid coverage for such children; and (2) impose income-related premiums with respect to such children provided medical assistance
Section 6063 -
Authorizes the Secretary to conduct, during each of FY2007-FY2011, demonstration projects under which up to ten states are awarded grants, on a competitive basis, to test the effectiveness in improving or maintaining a child's functional level, as well as the cost-effectiveness, of covering home and community-based alternatives to psychiatric residential trearment for children enrolled in the Medicaid program. Makes appropriations for FY2007-FY2011.
Section 6064 -
Amends SSA title V (Maternal and Child Health Services) to make appropriations for FY2007-FY2009 for the development and support of family-to-family health information centers under SPRANS (Special Projects of Regional and National Significance edicaid plan
Section 6065 -
Extends Medicaid eligibility to persons who are under age 21 and who are eligible for SSI (Supplemental Security Income) under SSA title XVI, effective on the later of: (1) the date the application was filed: or (2) the date SSI eligibility was granted. Subchapter B: Money Follows the Person Rebalancing Demonstration -
Section 6071 -
Authorizes the Secretary to award, on a competitive basis, grants to states for (Money Follows the Person, or MFP) demonstration projects designed to achieve certain objectives, including rebalancing, that is, increasing the use of home and community-based, rather than institutional, long-term care services under state Medicaid programs. Makes appropriations for FY2007-FY2011. Subchapter C: Miscellaneous -
Section 6081 -
Directs the Secretary to provide for payments to states for the adoption of innovative methods to improve the effectiveness and efficiency in providing medical assistance under Medicaid.
Section 6082 -
Directs the Secretary to establish a five-year demonstration program under which up to 10 states may provide under their state Medicaid plans for alternate benefits (including contributions to a health opportunity account) for eligible population groups in one or more geographic areas of the state.
Section 6083 -
Gives states the option of providing for establishment of a non-emergency medical transportation brokerage program in order more cost-effectively to provide transportation for Medicaid-eligible individuals to medical care or services.
Section 6084 -
Extends the Transitional Medical Assistance and the abstinence education block grant programs through December 31, 2006.
Section 6085 -
Requires any provider of emergency services that does not have in effect a contract with a Medicaid managed care entity to accept as payment in full no more than it could collect if the beneficiary received medical assistance other than through enrollment in such entity. Specifies a payment formula for a state where rates are negotiated by contract and not publicly released.hospitals.
Section 6086 -
Provides for home and community-based services as an optional benefit for elderly and disabled individuals.
Section 6087 -
Allows a state to provide as "medical assistance" payment for self-directed personal assistance services pursuant to a written plan of care to individuals who would otherwise require and receive Medicaid personal care services, or home and community-based services under a waiver.
Subtitle B - SCHIP
Section 6101 -
Amends SSA title XXI (SCHIP) to provide for additional allotments to states to eliminate FY2006 funding shortfalls.
Section 6102 -
Prohibits a waiver, experimental, pilot, or demonstration project from allowing the use of funds to provide child health assistance to nonpregnant childless adults.
Section 6103 -
Continues through FY2004-FY2005 the authority for qualifying states to apply federal SCHIP matching funds toward the coverage of certain children enrolled in regular Medicaid.
Subtitle C - Katrina Relief
Section 6201 -
Appropriates $2 billion (in addition to any funds made available for the National Disaster Medical System under the Department of Homeland Security for health care costs related to Hurricane Katrina) for use by the Secretary to pay eligible states for: (1) the non-federal share of expenditures with respect to evacuees receiving health care under an approved Multi-State Section 115 Demonstration Project; (2) reimbursement of the reasonable administrative costs related to such projects; (3) reimbursement of the non-federal share of expenditures for medical care provided to individuals under Medicaid and SCHIP plans; and (4) other purposes, if approved by the Secretary, to restore access to health care in impacted communities.
Section 6202 -
Authorizes and makes appropriations for FY2006 grants to states for: (1) up to half the losses incurred by a state in connection with the operation of their high risk pool; (2) seed money to create and initially fund a high risk pool.
Title VII - Human Resources and Other Provisions
Subtitle A - TANF
Section 7101 -
Amends SSA title IV part A (Temporary Assistance for Needy Families) (TANF) to extend the TANF program at the FY2004 level through FY2010. Makes apropriations. Extends the National Random Sample Study of Child Welfare through FY2010.
Section 7102 -
Revises the formula for the caseload reduction credit with respect to work participation rates. Includes families receiving assistance under separate state programs in the calculation of work participation rates. Directs the Secretary to promulgate regulations for determining whether activities may be counted as work activities, how to count and verify reported hours of work, and work-eligible individuals. Provides for a state penalty for failure to establish or comply with work participation verification procedures.
Section 7103 -
Replaces incentive bonuses to states for a decrease in the illegitimacy rate with healthy marriage promotion and responsible fatherhood grants. Limits the use of funds for: (1) demonstration projects designed to test the effectiveness of tribal governments or consortia in coordinating the provision of child welfare services to tribal families at risk of child abuse or neglect; and (2) activities promoting responsible fatherhood. Makes appropriations for FY2006-FY2010.
Subtitle B - Child Care
Section 7201 -
Makes appropriations for FY2006-FY2010 for entitlement grants to states for child care.
Subtitle C - Child Support
Section 7301 -
Modifies the rule requiring assignment of support rights as a condition of receiving TANF. Revises requirements for the distribution of arrearages with respect to families that formerly received TANF. Declares that states shall not be required to pay the federal government the federal share of amounts collected on behalf of a family: (1) that formerly received TANF, to the extent that the state pays (passes through) the amount to the family; or (2) that currently receives assistance, to the extent of a certain portion passed through to the family. Requires the State plan to include an election as to which rules, new or old, to apply in distributing child support arrearages collected on behalf of families formerly receiving assistance. Gives States the option to discontinue pre-1997 support assignments, and to discontinue post-1997 assignments. Revises requirements for use of the tax refund intercept program to collect past-due child support on behalf of children who are not minors. Gives states assisting other states the option to use their statewide automated data processing and information retrieval system for interstate cases.
Section 7302 -
Revises requirements for the mandatory three-year review and adjustment of child support orders for families receiving TANF. Eliminates the state's dependence on a request of the state agency or of either parent to conduct such a review, if there has been an assignment to the state of rights to collect child support on behalf of a child. (Requires the state, in the case of an assignment, to conduct such a review and adjustment.)
Section 7303 -
Reduces from $5,000 to $2,500 the amount of a child support arrearage triggering referral for passport denial of the parent responsible for the arrearage.
Section 7304 -
Revises the formula for the permanent appropriation of funds for: (1) technical assistance to states, training of state and federal staff, staffing studies, and related activities needed to improve child support and paternity establishment programs; and (2) research, demonstration, and special projects of regional or national significance relating to the operation of such state programs. Appropriates the greater of the preceding fiscal year appropriation or the FY2002 appropriation.
Section 7305 -
Revises the formula for the permanent appropriation of funds for the Federal Parent Locator Service. Appropriates the greater of the preceding fiscal year appropriation or the FY2002 appropriation. Repeals the fiscal year limitation to make permanent the continuing availability of appropriations until they are expended.
Section 7306 -
Authorizes the Secretary, through the Federal Parent Locator Service, to: (1) compare information concerning individuals owning past-due support with information maintained by insurers (or their agents) concerning insurance claims, settlements, awards, and payments; and (2) furnish information resulting from the data matches to the state agencies responsible for collection child support from the individuals.
Section 7307 -
Requires that all child support orders include a provision for medical support for children to be provided by either or both parents, and be enforced.
Section 7308 -
Reduces from 90% to 66% the federal matching rate for laboratory costs incurred in determining paternity.
Section 7309 -
Ends federal matching of state spending of federal incentive payments (which were repealed in 1998).
Section 7310 -
Provides for a mandatory annual fee of $25 for each case of successful child support collection for a family that has never received TANF, if the state collects more than $500.
Subtitle D - Child Welfare Authority
Section 7401 -
Prescribes the contents ofapplications for court improvement grants, including grants for improved data collection and training. Makes appropriations for FY2006-FY2010 for grants to: (1) ensure that the safety, permanence, and well-being needs of children are met in a timely and complete manner; and (2) provide for the training of judges, attorneys, and other legal personnel in child welfare cases. Requires that courts and agencies demonstrate meaningful collaboration between them in child welfare services programs. Provides for the use of child welfare records in state court proceedings.
Section 7402 -
Authorizes appropriations for FY2006 for safe and stable families programs.
Section 7403 -
Specifies criteria for the foster care circumstances of otherwise federally eligible children living with unlicensed relatives, in another ineligible setting, or who have not yet entered foster care, the administrative expenditures associated with which the state may receive federal matching funds.
Section 7404 -
Revises eligibility requirements for foster care maintenance payments and adoption assistance.
Subtitle E - Supplemental Security Income
Section 7501 -
Amends SSA title XVI (Supplemental Security Income) (SSI) to direct the Commissioner, before taking any implementing action, to review state agency determinations that individuals who have attained age 18 are blind or disabled.
Section 7502 -
Revises the formula for determining eligibility of individuals to installment payment of past-due monthly SSI benefits.
Subtitle F - Repeal of Continued Dumping and Subsidy Offset
Section 7601 -
Amends the Tariff Act of 1930 to repeal the continued dumping and subsidy offset.
Subtitle G - Effective Date
Section 7701 -
Sets forth the effective date of this title.

House Republican Conference Summary

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The bill contains the following citations to other parts of U.S. law:

Slip Laws

Slip laws refer to enacted bills and joint resolutions in their original form as enacted by Congress, that is, before other laws amend them. Slip laws are cited as “Public Law XXX-YYY”, where XXX is the number of the Congress in which the bill or resolution was introduced.

United States Code

The United States Code is the compilation of permanent laws enacted by Congress. Temporary and other non-permanent laws do not appear in the United States Code. (About half of the United States Code is the law itself, called positive law. The other half is merely a compilation of the laws but has no legal significance.)

Statutes at Large

The United States Statutes at Large is the compilation of all laws enacted by Congress.

  • 36 Stat. 111
  • 36 Stat. 234
  • 116 Stat. 716
  • 117 Stat. 2283
  • 118 Stat. 2299
  • 118 Stat. 3993

Other Citations

  • 11 U.S.C. Chapter 11